China Pension Shortfall to be CNY18.3Trl in 2013: Report

China’s pension shortfall is expected to be 18.3 trillion yuan ( about 2.9 trillion U.S. dollars) in the year 2013， building a case for a rise of retirement age.

China’s pension shortfall is expected to be 18.3 trillion yuan ( about 2.9
trillion U.S. dollars) in the year 2013, according to a report, headed by
China’s two leading economists, building a case for a rise of retirement
age.

The research group with Fudan University, led by chief economist with the
Bank of China Cao Yuanzheng, and Ma Jun, chief China economist for Deutsche Bank
AG, conducted the research based on data published by the National Bureau of
Statistics.

According to their calculation, China’s pension shortfalls could reach 18.3
trillion yuan in 2013, and 68.2 trillion by 2033, on unchanged pension polices,
and assume GDP grows 6 percent annually. That will account 38.7 percent of GDP
that year.

China’s pension liability could become a massive fiscal burden as more and
more of its population grows grey, the report said, suggesting the retirement
age should be raised by seven years to ease pressures.

Among other measures, the government should also transfer 80 percent of
shares in state-owned companies to the national pension fund and restructure the
public institutions, it said.

A Boston Consulting Group report in late April said deficit in China’s
pension system had climbed at an annual growth rate of 25 percent, hitting 195
billion yuan in 2010. The deficit may reach 2.5 trillion yuan in the next 20
years, it predicted.

Government data showed China’s labor pool will begin to shrink from 2015, and
the old over 50 will be 290 million in 2035, compared with 810 million of
working labor force, which means there will be less than two workers for every
retired by the year.

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